According to the Arizona Instructions, if you receive pension income from any retirement system or plan established by federal law, you will be able to subtract up to $2,500 from your income that you are reporting on your Arizona return.
If you are married filing jointly, each spouse will be able to subtract their own retirement amount up to $2,500, each.
Are there exceptions?
As of tax year 2021, if you received benefits, annuities and pensions as retired or retainer pay of the uniformed services of the United States, you may subtract 100% of the amount you received. If both you and your spouse each received such income, each spouse may subtract 100% of the amount received.
Program Entry
To find this entry, please go to:
- State Section
- Edit Arizona Return
- Subtractions from Income
- Enter the qualified benefits, annuities and pensions for retired/retainer pay of the uniformed services